Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer Intern has suggested that the cost system might be providing misleading information The controller decided that a good summer project for the intern would be to develop, in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intern identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: Contot Coute Mtivity DEERE Neceiving 600,000 Direct material boat Manufacturing 5,500,000 Machine Machine setup 300.000 Production thipping 1,000,000 tite hipped In this particular area, Calin produces two of its many products: Standard and Deluse. The following are data for production for the latest full year of operations Total art material ceste Total direct let Total machine-houre Total of te Total pounds of material Total de labore Humber of its produced and shipped Products Standard Delce $200,000 $200,000 650,000 $10,000 1)2,000 110,000 130 13,500 13,500 6.450 4,200 11.000 14,000 Required: a. The current cost accounting system charges overhead to products based on machine hours. What unit product costs will be reported for the two products if the current cost system continues to be used? b. The intern suggests an ABC wystem using the cost drivers identified above What unit product costs will be reported for the two products the ABC system is used? Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues to be used? b. The intern suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products if the ABC system is used? Complete this question by entering your answers in the tabs below. Required A Required B The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues to be used? (Do not round Intermediate calculations and round "Unit cost answers to 2 decimal places.) Standard Deluxe Direct costs Overhead Total costs Number of units Unit cost $ 0 $ 0 0 0 Required B > Required A Required B The Intern suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products if the ABC system is used? (Do not round Intermediate calculations and round "Unit cost" answers to 2 decimal places.) Standard Deluxe Direct Costs Overhead Receiving Manufacturing Machine setup Shipping Total costs $ 0 Number of units Unit cost 0 $ 0 0
